First increase in turnover for almost a year and better than expected outlook. Meta closes the first quarter of the year amid encouraging surprises, living up to its promise of a year dedicated to efficiency and improving financial performance despite the troubled bet on the metaverse and the woes of digital advertising in a climate of economic uncertainty.
The bills
Group revenues were $28.65 billion, up 3% and above analysts’ expectations of $27.67 billion. Profits slipped 24% to $5.71 billion, weighed down by restructuring charges. But earnings per share were $2.20, better than expected $2.03. After the market, the share gained more than 10 per cent following the balance sheet. After having lost two thirds of its value last year, the Meta stock has risen by 74 percent since the beginning of January.
L’outlook
Particular attention was paid by the market to the forecast for the second quarter of a turnover higher than market expectations. More specifically, the company expects revenue for the current three months to be between $29.5 and $32 billion, compared with analysts’ estimates of $29.53 billion. The group, fresh from announcing more than 20,000 overall job cuts in an effort to cut costs, also anticipated total expenses for 2023 of between 86 and 90 billion, including reorganization costs between 3 and 5 billion. The investments will be between 30 and 33 billion. Test bench of the savings and revitalization strategy will now become the next quarterly accounts.
Advertising
Advertising sales, essential for Meta’s business, held up despite the pressure: it totaled 28.3 billion against the 26.88 expected. “We had a good quarter and our community continues to grow,” said CEO Mark Zuckerberg. Monthly active users met forecasts at 2.99 billion, while daily users beat them at 2.04 billion. Average revenue per user topped expectations at $9.62 versus $9.30.
Artificial intelligence
Zuckerberg underlined the contribution of artificial intelligence, which has now become one of the new frontiers for the growth of high-tech: “Our work in AI is driving good results in all apps and the business“. He then explicitly cited the new commitment to efficiency as the reason for the quarterly results: “We are becoming more efficient in order to create products faster and be in a stronger position for our long-term vision”.